FINACT2019A-05465-OMC-ROC.pdf

2019A-05465-OMC-ROC · Registrar of Contractors · 2019-12-04

REGISTRAR OF CONTRACTORS OF THE STATE OF ARIZONA

Arizona Registrar of Contractors, Case No. 2019-05465 COMPLAINANT, Docket No. 2019A-05465-OMC-ROC v. Consolidated Complaint Nos. Cabinet Cures of Arizona LLC, 2019-05392 License No. ROC 289961, 2019-05155 2019-04755 RESPONDENT. 2019-05174 FINAL ADMINISTRATIVE DECISION AND ORDER

Under A.R.S. § 41-1092.08(B), the Registrar may review and accept, modify, or reject an administrative law judge’s written decision. If the Registrar modifies or rejects that decision, then the Registrar must provide written justification setting forth the reasons for the modification or rejection of each finding of fact or conclusion of law. REGISTRAR’S ACCEPTANCE In this case, a hearing was held, and the administrative law judge issued a written decision. See Administrative Law Judge Decision, attached. The Registrar reviewed that decision and accepts it. CONCLUSION AND ORDER Because the Registrar has accepted the administrative law judge’s decision, that decision is the final administrative decision in this case and becomes effective on January 11, 2020. FINAL NOTES On page 4, line 19 replace “June 24, 2019” with “May 23, 2019”. On page 5, line 21 replace “October 22, 2019” with “October 10, 2019”.

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19 Dated December 2, 2019 By: /s/ Joseph Citelli Joseph Citelli, Chief Counsel Chief of Legal Department and Recovery Fund Arizona Registrar of Contractors Copy mailed via USPS First Class mail December 2, 2019, 2019 to: Respondent Cabinet Cures of Arizona LLC 1660 S Alma School Rd Mesa, AZ 85210-3069 Copy sent electronically this same date to: Respondent at email address on record with the Registrar Registrar’s Counsel John Tellier, Esq., Assistant Attorney General Office of Administrative Hearings Jenna Clark, Administrative Law Judge Case No. 2019-05465/tw

of 2 REGISTRAR OF CONTRACTORS 1700 W. Washington St.– Ste. 105 – Phoenix, AZ 85007-2812 Telephone (602)542-1525 Toll Free (877)692-9762 Lg131 8/19 RECEIVED 11.21.2019 ROC LEGAL

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

Arizona Registrar of Contractors, No. 2019A-05465-OMC-ROC COMPLAINANT, ADMINISTRATIVE LAW JUDGE vs. DECISION Cabinet Cures of Arizona LLC, ROC License: ROC 289961 RESPONDENT.

HEARING: November 19, 2019 at 1:00 PM. APPEARANCES: Assistant Attorney General John Tellier, Esq. appeared on behalf of the Arizona Registrar of Contractors (“Registrar”) with David Nichols, Jack Grimm, Alberto Bernal, David Fagerburg, and Randy Morris as witnesses. No appearance(s) by or on behalf of Cabinet Cures of Arizona LLC (Respondent”). Robert Sterling observed. ADMINISTRATIVE LAW JUDGE: Jenna Clark. _____________________________________________________________________ After review of the hearing record in this matter, the undersigned Administrative Law Judge makes the following Findings of Fact and Conclusions of Law, and issues this RECOMMENDED ORDER to the Director of the Registrar. FINDINGS OF FACT BACKGROUND AND PROCEDURE 1. Pursuant to ARIZ. ADMIN. CODE R4-9-117, Administrative Notice is taken of Respondent’s license file as shown on the Registrar’s public website as of November 19, 2019. According to the Registrar’s website, on February 07, 2014, Respondent was issued ROC License No 289961 for Specialty Dual CR-60 Finish Carpentry.1 The license was suspended effective November 08, 2019. Anthony Charles Duenas is listed on the license as its Qualifying Party and Signor. Respondent’s address of record for

1 See https://roc.az.gov/contractor-search?Id=a0Yt000000ACMhbEAH; see also Registrar electronic file at page 19. Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826 RECEIVED 11.21.2019 ROC LEGAL

the license is 1660 S. Alma School Rd., Mesa, AZ 85210-3069. The license has an active $6,750.00 surety bond issued through RLI Insurance Company. There are three open complaints against the license, which are presumed to be related to this matter.

The license had been disciplined on one prior occasion.

2. On November 08, 2019, an ORDER OF SUMMARY SUSPENSION, ORDER

CONSOLIDATING CASES, AND NOTICE OF PROMPTLY INSTITUTED PROCEEDING was issued

against Respondent after the Registrar received three complaints against

Respondent’s licenses between September and October of 2019 alleging poor work

and/or abandonment of contract. The ORDER set forth facts supporting the Registrar’s

summary suspension regarding complaints received by the following homeowners:

Peggy Jackson (Case No. 2019-04755), David Nichols (Case No. 2019-05155), and

Brad and Sandra Vandermoon (Case No. 2019-05392).

3. On November 14, 2019, a SUPPLEMENTAL NOTICE AND SECOND ORDER

CONSOLIDATING CASES against Respondent was issued to include a complaint filed by

Caroline Cross (Case No. 2019-05174), which alleged abandonment of contract.

4. Upon investigation, the Registrar substantiated all four complaints

regarding abandonment of contract and/or poor workmanship. Given the circumstances, the Registrar determined that the public health, safety or welfare imperatively required emergency action under ARIZ. REV. STAT. § 41-1092.11(B). 5. The Registrar set the hearing for November 19, 2019, at 1:00 p.m. before the Office of Administrative Hearings (“OAH”), an independent state agency, located in Phoenix, Arizona. The ORDER was mailed to Respondent’s address of record via certified mail. The correspondence was not returned by the United States Postal Service as refused or undeliverable. 6. An evidentiary hearing was held per the ORDERS to determine whether cause exists to uphold the summary suspension of Respondent’s license, and whether grounds exist for the Registrar to revoke Respondent’s licenses based on the following alleged violations: Charge 1: Abandonment of a Contract without Legal Excuse (ARIZ. REV. STAT. § 32-1154(A)(1)) – Three Counts RECEIVED 11.21.2019 ROC LEGAL

Charge 2: Minimum Workmanship Standards (ARIZ. REV. STAT. § 32- 1154(A)(3) and ARIZ. ADMIN. CODE R4-9-108) – One Count Charge 3: Violation of a Rule Adopted by the Registrar (ARIZ. REV. STAT. § 32-1154(A)(4) and ARIZ. ADMIN. CODE R4-9-108) – One Count Charge 4: Failure in Any Material Respect to Comply (ARIZ. REV. STAT. § 32-1154(A)(12); ARIZ. REV. STAT. § 32-1124(B)) – One Count Charge 5: Failure in Any Material Respect to Comply (ARIZ. REV. STAT. § 32-1154(A)(12); ARIZ. REV. STAT. § 32-1158(A)) – Three Counts

The Registrar was represented by Assistant Attorney General Jon Tellier, Esq., who

submitted nineteen exhibits and presented the testimonies of homeowner David

Nichols, and Registrar investigators Jack Grimm (“Investigator Grimm”), Alberto Bernal

(“Investigator Bernal”), David Fagerburg (“Investigator Fagerburg”), and Randy Morris

(“Investigator Morris”). The Registrar’s agency record was also admitted as its own

exhibit. 7. Although the start of the duly noticed hearing was delayed ten minutes to allow Respondent additional travel time, Respondent did not appear on his own behalf, through an authorized officer, employee, or attorney, and did not contact OAH to request that the start of the hearing be further delayed. Respondent did not request to appear telephonically, nor did Respondent request that the hearing be continued. Consequently, Respondent did not present any evidence to defend his license. HEARING EVIDENCE Homeowner Complaints Peggy Jackson (Case No. 2019-04755) 8. On or about September 19, 2019, Ms. Jackson filed a complaint with the Registrar against Respondent, whereby she accused Respondent of abandonment of their February 23, 2019, contract to install cabinets at her home located at 10847 N. 53rd Way, Scottsdale, AZ 85254 for the sum total of $25,305.00.2 Ms. Jackson also accused Respondent of poor workmanship. 9. On September 25, 2019, the Registrar asked Ms. Jackson for a copy of her signed contract agreement with Respondent.3 On September 28, 2019, Ms. See Registrar’s electronic file at pages 23-24. 3 See Registrar Exhibit 2. RECEIVED 11.21.2019 ROC LEGAL

Jackson replied that she had never executed a written agreement with Respondent, but had received a written bid and Change Order.4 10. Investigator Morris was assigned by the Registrar to investigate Ms.

Jackson’s complaint. Investigator Morris testified that he conducted a jobsite inspection

on October 23, 2019, at 9:30 a.m.5 Respondent was not present. Investigator Morris

took nineteen photos of the project and concluded that Respondent did not finish the

job. He also concluded that Respondent’s workmanship on items performed failed to

meet minimum standards.

11. On November 06, 2019, Investigator Morris issued a W ARNING LETTER to

Respondent to advise that his Change Order for Ms. Jackson and advertising

documentation did not include his license number proceeded by “ROC” in violated ARIZ.

REV. STAT. § 32-1124(B).6

12. According to the evidence and testimony, although Ms. Jackson paid

Respondent $23,240.00, Respondent did not complete the project and the work that

was performed was substandard. Respondent never issued a refund to Ms. Jackson.

Caroline Cross (Case No. 2019-05174)

13. On or about October 16, 2019, Ms. Cross filed a complaint with the Registrar against Respondent, whereby she accused Respondent of abandonment of their June 24, 2019, contract to install cabinets at her home located at 2031 W. Nopal Ave., Mesa, AZ 85202 for the sum total of $12,125.00.7 14. Investigator Bernal was assigned by the Registrar to investigate Ms. Cross’ complaint. Investigator Bernal testified that he conducted a jobsite inspection on November 06, 2019, at 2:00 p.m.8 Respondent was not present. Investigator Bernal took twenty-seven photos of the project and observed cabinet installation in Ms. Cross’ kitchen and bar, but noted that many components were missing and the cabinets themselves needed adjustments in and/or replacements in some areas.

See Registrar Exhibit 3. See Registrar Exhibit 4. See Registrar Exhibit 6. . See Registrar Exhibit 20. 8 See Registrar Exhibit 22. RECEIVED 11.21.2019 ROC LEGAL

15. On November 08, 2019, Investigator Bernal issued a W ARNING LETTER to Respondent to advise that his contract with Complainant did not meet statutory minimum elements in violation of ARIZ. REV. STAT. § 32-1158(A).9 Respondent was

further advised that failure to comply with ARIZ. REV. STAT. § 32-1158(A) was a violation

of ARIZ. REV. STAT. § 32-1154(A)(12), which could result in discipline against

Respondent’s license including suspension or revocation.10

16. On November 13, 2019, Investigator Bernal issued a DIRECTIVE FROM THE

REGISTRAR to Respondent because he found that Respondent had abandoned the

project, and that the work Respondent had performed on the project failed to meet

minimum Registrar workmanship standards.11 Specifically, Respondent was ordered to

complete the project within the scope of his license, per contract, and via appropriate

means.12 Respondent was put on notice that he has until December 02, 2019, to notify

the Registrar of its compliance with the corrective order or face discipline pursuant to

ARIZ. ADMIN. CODE R4-9-108, and ARIZ. REV. STAT. §§ 32-1154(A)(22) and 32-1154(E).13

Respondent failed to timely comply.

17. According to the evidence and testimony, although Ms. Cross issued

payments to Respondent totaling $12,125.0014, Respondent did not complete the project and the work that was performed was substandard. Respondent never issued issue a refund to Ms. Cross. David Nichols (Case No. 2019-05155) 18. On or about October 22, 2019, Mr. Nichols filed a complaint with the Registrar against Respondent, whereby he accused Respondent of abandonment of their July 18, 2019, contract to install cabinets at his home located at 2865 W. Haley Dr., Anthem, AZ 85086 for the sum total of $5,000.00. 19. Investigator Fagerburg was assigned by the Registrar to investigate Mr. Nichol’s complaint. Investigator Fagerburg testified that he conducted a jobsite

See Registrar Exhibit 23. Id. See Registrar Exhibit 24. Id. 13 Id. RECEIVED 11.21.2019 ROC LEGAL

inspection on November 05, 2019, at 10:30 a.m.15 Respondent was not present. Investigator Fagerburg took six photos of the project and observed no evidence of work being started, let alone completed, on the project. Investigator Fagerburg also reviewed

an October 16, 2019, bond denial letter Mr. Nichol’s received from Respondent’s bond

insurer RLI Insurance Company, which denied Mr. Nichol’s claim for payment.16 On

November 06, 2018, a CITATION for violations of ARIZ. REV. STAT §§ 32-1154(A)(1) and

32-1154(A)(3) and ARIZ. ADMIN. CODE R4-9-108 was issued to Respondent by the

Registrar.17

20. Mr. Nichols testified that Respondent gave him multiple excuses

regarding the delay of his cabinet installation, including theft, and finally alleged that he

had been required to shutter his business do to a cease and desist order Respondent

had received from his parent company.

21. According to the evidence and testimony, although Mr. Nichols gave

Respondent a deposit of $2,500.00, Respondent never started work on the project and

never intended to. Respondent never issued a refund to Mr. Nichols.

Brad and Sandra Vandermoon (Case No. 2019-05392)

22. On or about October 28, 2019, the Vandermoons filed a complaint with the Registrar against Respondent, whereby they accused Respondent of abandonment of their July 25, 2019, contract to install cabinets at their home located at 1351 E. Desert Flower Ln., Phoenix, AZ 85048 for the sum total of $21,200.00.18 23. Investigator Grimm was assigned by the Registrar to investigate the Vandermoons’ complaint. Investigator Grimm testified that he conducted a jobsite inspection on November 05, 2019, at 2:00 p.m.19 Respondent was not present. Investigator Grimm took seven photos of the project and observed no evidence of work being started, let alone completed, on the project. On November 06, 2018, Investigator Grimm issued a W ARNING LETTER to Respondent to advise that his contract with

See Registrar Exhibit 21. See Registrar Exhibit 10. See Registrar Exhibit 9. See Registrar Exhibit 11. 18 See Registrar Exhibit 12. RECEIVED 11.21.2019 ROC LEGAL

Complainant, or lack thereof, did not meet statutory minimum elements in violation of ARIZ. REV. STAT. § 32-1158(A).20 Respondent was further advised that failure to comply with ARIZ. REV. STAT. § 32-1158(A) was a violation of ARIZ. REV. STAT. § 32-

1154(A)(12), which could result in discipline against Respondent’s license including

suspension or revocation.21

24. On November 07, 2019, a CITATION for violations of ARIZ. REV. STAT §§

32-1154(A)(1), 32-1154(A)(12) and 32-1158(A) was issued to Respondent by the

Registrar.22

25. According to the evidence and testimony, although the Vandermoons

gave Respondent payments totaling $7,685.00, Respondent never started work on the

project and never intended to. Though promised, Respondent never issued a refund to

the Vandermoons.

CONCLUSIONS OF LAW

1. These matters lie within the Registrar’s jurisdiction,23 and was properly brought before OAH.24 2. The purpose of the ROC’s licensing statutes is to protect the public from unscrupulous, unqualified, and financially irresponsible contractors.25 3. The summarily suspended status of Respondent’s licenses does not deprive the Registrar of its ability to prosecute these complaints or prevent the Registrar from determining the merits of these complaints.26 4. The NOTICE OF HEARING that the Registrar mailed to Respondent at its address of record was reasonable. Neither the NOTICE OF HEARING nor SUPPLEMENTAL

See Registrar Exhibit 13. 20 See Registrar Exhibit 14. Id. 22 See Registrar Exhibit 15. See ARIZ. REV. STAT. § 32-1154(A). See ARIZ. REV. STAT. §§ 41-1092 et seq. See Aesthetic Property Maintenance v. Capital Indem. Corp., 183 Ariz. 74, 900 P. 2d 1210 (1995). See ARIZ. REV. STAT. § 32-1154(D). That statute provides that “[t]he expiration, cancellation, suspension or revocation of a license . . . shall not deprive the registrar of jurisdiction to proceed with any investigation of or action or disciplinary proceeding against such licensee, or to render a decision suspending or revoking such a license . . . .” RECEIVED 11.21.2019 ROC LEGAL

NOTICE sent to Respondent were returned as undeliverable. Thus, Respondent is deemed to have received notice of the scheduled proceedings.27 5. The Registrar bears the burden of proof to establish grounds for

suspension or revocation of Respondent’s contractor’s license by a preponderance of

the evidence.28

6. “A preponderance of the evidence is such proof as convinces the trier of

fact that the contention is more probably true than not.”29 A preponderance of the

evidence is “[t]he greater weight of the evidence, not necessarily established by the

greater number of witnesses testifying to a fact but by evidence that has the most

convincing force; superior evidentiary weight that, though not sufficient to free the mind

wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to

one side of the issue rather than the other.”30

7. ARIZ. REV. STAT. § 32-1154(A)(1) includes among the grounds for

suspension, revocation, or other disciplinary action against a contractor’s license,

“[a]bandonment of a contract or refusal to perform after submitting a bid on work

without legal excuse for the abandonment or refusal.”

8. ARIZ. REV. STAT. § 32-1154(A)(3) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.” 9. ARIZ. REV. STAT. § 32-1154(A)(4) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, in part, “[f]ailure to comply with the statutes or rules.” 10. ARIZ. REV. STAT. § 32-1154(A)(12) includes among the grounds for suspension, revocation, or other disciplinary action against a contractor’s license, “[f]ailure in any material respect to comply with this chapter.”

See ARIZ. REV. STAT. §§ 41-1092.04 and 41-1092.05(D). See ARIZ. REV. STAT. § 41-1092.07(G)(2); ARIZ. ADMIN. CODE R2-19-119(B)(1); see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). MORRIS K. UDALL, ARIZONA LAW OF EVIDENCE § 5 (1960). 30 BLACK’S LAW DICTIONARY at 1220 (8th ed. 1999). RECEIVED 11.21.2019 ROC LEGAL

a. Namely, ARIZ. REV. STAT. § 32-1124(B) which holds, in pertinent part, that “[l]icenses issued under this chapter and any renewals shall be signed by the registrar or the registrar's designated representative and by the

licensee. The license shall be nontransferable, and satisfactory evidence

of possession shall be exhibited by the licensee on demand. The license

number appearing on any licenses held by the licensee shall be preceded

by the acronym "ROC" and shall be posted in a conspicuous place on

premises where any work is being performed, shall be placed on all

written bids submitted by the licensee and shall be placed on all

broadcast, published, internet or billboard advertising, letterheads and

other documents used by the licensee to correspond with the licensee's

customers or potential customers in the conduct of business regulated by

this chapter.” And,

b. ARIZ. REV. STAT. § 32-1158(A) which holds, in pertinent part, that a

contract between a contractor and property owner amounting to more

than one thousand dollars must contain the following information in

writing: 1. The name of the contractor and the contractor's business address and license number. 2. The name and mailing address of the owner and the jobsite address or legal description. 3. The date the parties entered into the contract. 4. The estimated date of completion of all work to be performed under the contract. 5. A description of the work to be performed under the contract. 6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes. 7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner. 8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract. RECEIVED 11.21.2019 ROC LEGAL

9. That the property owner has the right to file a written complaint with the Registrar for an alleged violation of ARIZ. REV. STAT § 32-1154(A). The contract shall contain the Registrar's telephone number, website address, and shall state that complaints must be made within the applicable time period as set forth in ARIZ. REV. STAT § 32-1155(A). The information must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor. 11. ARIZ. ADMIN. CODE R4-9-108(A) states that “[a] contractor shall perform all work in a professional and workmanlike manner.” 12. ARIZ. REV. STAT. § 41-1092.11(B) provides, in pertinent part, that if an “[a]gency finds that the public health, safety or welfare imperatively requires emergency action, and incorporates a finding to that effect in its order, the agency may order summary suspension of a license pending promptly instituted proceedings for revocation or other action.” 13. The evidence in this matter is undisputed. 14. The record reflects that Respondent contracted with Ms. Jackson, Ms. Cross, Mr. Nichols, and the Vandermoons (collectively “Complainants”) for a residential cabinet installation projects and Complainants tendered payments for Respondent’s services and/or materials, Respondent did not complete any of the projects, and the work Respondent did perform on some of the projects fell below the Registrar’s minimum workmanship standards. It is further undisputed that Respondent failed to attend any of the jobsite inspections for the projects, and made no attempts to remediate the deficient work or complete any of the projects. 15. Therefore, the Registrar established violations of ARIZ. ADMIN. CODE R4-9- 108 and ARIZ. REV. STAT. §§ 32-1154(A)(1), and 32-1154(A)(3). 16. The record also reflects that Respondent’s contracts, or lack thereof, for the Jackson, Cross, and Vandermoon projects did not meet statutory requirements. 17. Therefore, the Registrar also established violations of ARIZ. REV. STAT. §§ 32-1154(A)(12), namely 32-1158(A).

RECEIVED 11.21.2019 ROC LEGAL

18. Therefore, the only issue in dispute is whether Respondent raised a sufficient justification or excuse for failing to timely and completely finish Complainants projects per their respective agreements. These are affirmative defenses that

Respondent bears the burden to establish. In failing to appear for the duly noticed

hearing, Respondent failed to provide evidence in mitigation, refute the Registrar’s

evidence, or justify his inaction in this matter. Thus, his burden has not been sustained.

19. Respondent’s pattern of taking payments on new contracts, while failing

to fulfill existing contracts, jeopardizes public safety and welfare. Additionally,

Respondent’s absence from an administrative hearing regarding his license is a factor

in aggravation, and confirms that at this time Respondent cannot be regulated by the

Registrar. Notably, the tribunal is particularly troubled by the fact that Respondent

accepted no less than $45,550.00 in payments from victimized homeowners during his

apparent grift. Because Respondent failed to appear, no evidence was offered to

establish an affirmative defense to the above-captioned conduct.

20. Therefore, based on the record, the Registrar has established more than

ample cause to summarily suspend Respondent’s license under ARIZ. REV. STAT. § 41-

1092.11(B). 21. The tribunal holds that revocation of Respondent’s carpentry contracting license pursuant to ARIZ. REV. STAT. §§ 32-1154(A)(1), 32-1154(A)(3); ARIZ. ADMIN. CODE R4-9-108, and 32-1154(A)(12); namely 32-1158, is appropriate and in the best interest of the public. RECOMMENDED ORDER In light of the foregoing, IT IS RECOMMENDED that the Registrar’s ORDER OF SUMMARY SUSPENSION of Respondent License No. 289961, as issued on November 08, 2019, be affirmed. IT IS FURTHER RECOMMENDED that on the effective date of the FINAL ORDER in this matter, Respondent License No. 289961 shall be revoked by the Registrar. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification. RECEIVED 11.21.2019 ROC LEGAL

Done this day, November 20, 2019.

/s/ Jenna Clark Administrative Law Judge

Transmitted electronically to:

Jeffrey Fleetham, Director Registrar of Contractors